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HomeMy WebLinkAboutResolution No. 241-18 (1): TIF #66-1 -Bloom Riverfront EDA RESOLUTION NO. ______ COUNCIL RESOLUTION NO. ______ ROCHESTER ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION APPROVING AN ECONOMIC DEVELOPMENT DISTRICT AND ECONOMIC DEVELOPMENT PLAN THEREFOR, APPROVING A REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT AND A TAX INCREMENT FINANCING PLAN THEREFOR AND APPROVING A TERM SHEET FOR A DEVELOPMENT ASSISTANCE AGREEMENT BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Rochester Economic Development Authority (the “EDA”), as follows: Section 1. Recitals. 1.01. It has been proposed that the EDA establish Economic Development District No. 66 (the “Development District”), adopt the Economic Development Plan for the Development District (the “Development Plan”), establish DMC Redevelopment Tax Increment Financing District No. 66-1 (Bloom Riverfront) within the Development District (the “TIF District”) and adopt a Tax Increment Financing Plan therefor (the “TIF Plan” and, together with the Development Plan, the “Plans”), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 through 469.047, Sections 469.090 through 469.1082, Sections 469.174 through 469.1794 (the “TIF Act”), and Minnesota Statutes, Sections 469.40 to 469.47 (the “DMC Act”), all as amended (collectively, the “Act”); all as reflected in that certain document entitled in part “Economic Development Plan for Economic Development District No. 66 of the Rochester Economic Development Authority and Tax Increment Financing Plan for DMC Redevelopment Tax Increment Financing District No. 66-1 (Bloom Riverfront),” dated July 2, 2018, and presented for the Board’s consideration. 1.02. The Board has investigated the facts relating to the establishment of the Development District, the adoption of the Development Plan, the establishment of the TIF District and the adoption of the TIF Plan. 1.03. The TIF District is being established to facilitate the demolition of existing buildings and the construction of a mixed use redevelopment project consisting of an approximately 925,673 square foot, two-tower, skyway connected structure with structured parking, approximately 181 hotel rooms, approximately 215 independent, assisted living and memory care apartment units and approximately 132 owner occupied condominium housing units, with retail on the street and skyway levels (the “Development”), to be located at 14 2nd Street SE, 50 3rd Street SE, and 11 4th Street SE in the City of Rochester, Minnesota (the “City”). 527758v1 RC110-90 1.04. Certain written reports and other documentation (collectively, the “Reports”) relating to the Plans, including the tax increment application made and other information supplied by Bloom International Realty, LLC, a Minnesota limited liability company or an affiliate thereof (the “Developer”) as to the activities contemplated therein have heretofore been assembled or prepared by staff or others and submitted to the Board and/or made a part of the City and EDA files and proceedings on the Plans. The Reports include data, information and/or substantiation constituting or relating to (1) why the assistance satisfies the so-called “but for” test and (2) the bases for the other findings and determinations made in this resolution. The Board hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05. The TIF District is located within the boundaries of the Destination Medical Center Development District as defined in Minnesota Statutes, Section 469.40, Subdivision 5, as amended (the “DMC District”) as adopted in the Destination Medical Center Development Plan as defined in Minnesota Statutes, Section 469.40, Subdivision 6, as amended (the “DMC Development Plan”) and within the Downtown Waterfront subdistrict as described in the DMC Development Plan. The DMCC has approved the Development. 1.06. The EDA or the City has performed all actions required by law to be performed prior to the adoption and approval of the TIF Plan, including but not limited to notice to the County Commissioner representing the area of the County to be included in the TIF District, delivery of the TIF Plan to the County and School Board and the holding of a joint public hearing thereon by the City and the EDA following notice thereof published in the City’s official newspaper at least 10 but not more than 30 days prior to the public hearing. Section 2. Findings for the Adoption and Approval of the Plans. 2.01. The Board hereby finds that the Development District is proper and desirable to establish in the City and the Development Plan will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Development District by private enterprise. 2.02. The Board hereby finds that the TIF District is in the public interest and is a “redevelopment tax increment financing district within the area of the destination medical center development district to fund public infrastructure projects” within the meaning of Minnesota Statutes, Section 469.45, Subd. 4. Pursuant to the DMC Act, the EDA may establish a redevelopment tax increment financing district within the DMC District without meeting the requirements for redevelopment districts created pursuant to the general TIF Act, specifically, Minnesota Statutes, Sections 469.174, subdivision 10. 2.03. The Board hereby makes the following additional findings in connection with the TIF District: (a) The Board further finds that the proposed Development, in the opinion of the Board, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. 2 527758v1 RC110-90 (b) The Board further finds that the TIF Plan conforms to the general plan for the development or redevelopment of the City as a whole. (c) The Board further finds that the TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of the TIF District by private enterprise. (d) For purposes of compliance with Minnesota Statutes, Section 469.175, Subdivision 3(b)(2)(ii), the Board hereby finds that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing is approximately $0, which is less than $103,239,497 which is the increase in the market value estimated to result from the proposed development (approximately $133,397,000, assuming no annual inflation) after subtracting the present value of the projected tax increments for the maximum duration of the TIF District (approximately $30,157,503). Thus, the use of tax increment financing will be a positive net gain to the City, the School District, and the County, and the tax increment assistance does not exceed the benefit which will be derived therefrom. 2.04. The EDA elects to retain all of the captured tax capacity to finance the costs of the TIF District and the Development District. 2.05. The provisions of this Section 2 are hereby incorporated by reference into and made a part of the TIF Plan. 2.06. The Board further finds that the Plans are intended and in the judgment of the Council its effect will be to promote the public purposes and accomplish the objectives specified therein. The EDA also intends that it shall have and enjoy, with respect to the DMC Development District, the full range of powers and duties conferred upon the EDA pursuant to the Development Plan, the TIF Act, the DMC Act and such other legal authority as the EDA may have or enjoy from time to time. 2.07. The Development District and the TIF District are hereby established and the Plans, as presented to the Board on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the Executive Director of the EDA. City or EDA staff shall, in writing, request the Olmsted County Auditor to certify the new TIF District and file the Plans with the Commissioner of Revenue and the Office of the State Auditor. 2.08. The Board finds that the Development is a public infrastructure project within the meaning of Minnesota Statutes, Section 469.40, subdivision 11, which provides for: acquiring real property and other assets associated with the real property; demolishing, repairing or rehabilitating buildings; installing, constructing or reconstructing elements of public infrastructure required to support the overall development of the DMC Development District; acquiring, constructing or reconstructing, or equipping parking facilities and other facilities to encourage intermodal transportation and public transit; making related site improvements; and preparing land for private development; and that the EDA approves the Development as consistent with the DMC Development Plan. 3 527758v1 RC110-90 Section 3. Interfund Loans. 3.01. The Board hereby approves a policy on interfund loans or advances (“Loans”) for the TIF District, as follows: (a) The authorized tax increment eligible costs (including without limitation out-of-pocket administrative expenses in an amount up to $625,119, interest in an amount up to $18,438,144 and other project costs in an amount up to $43,448,591) payable from the TIF District, as its TIF Plan is originally adopted or may be amended, may need to be financed on a short-term and/or long-term basis via one or more Loans, as may be determined by the City Finance Director from time to time. (b) The Loans may be advanced if and as needed from available monies in the City’s or EDA’s general fund or other City or EDA fund designated by the City Finance Director. Loans may be structured as draw-down or “line of credit” obligations of the lending fund(s). (c) Neither the maximum principal amount of any one Loan nor the aggregate principal amount of all Loans may exceed $62,511,854 outstanding at any time. (d) All Loans shall mature not later than February 1, 2047 or such earlier date as the City Finance Director may specify in writing. All Loans may be pre-paid, in whole or in part, whether from tax increment revenue, tax increment revenue bond proceeds or other eligible sources. (e) The outstanding and unpaid principal amount of each Loan shall bear interest at the rate prescribed by the statute (Minnesota Statutes, Section 469.178, Subdivision 7), which is the greater of the rates specified under Sections 270C.40 or 549.09 at the time a Loan, or any part of it, is first made, subject to the right of the City Finance Director to specify a lower rate (but not less than the City’s then-current average investment return for similar amount and term). (f) Such Loans within the above guidelines are pre-approved. The Loans need not take any particular form and may be undocumented, except that the City Finance Director shall specify the principal amount and interest rate and maintain all necessary or applicable data on the Loans. Section 4. Approval of Term Sheet. 4.01. The Developer has presented the EDA with a proposal for the Development and a term sheet for a Development Assistance Agreement between the City, the EDA and the Developer, regarding the Development and the terms and conditions of the City’s conveyance of certain property and the EDA’s assistance with financing certain costs of the Development (the “Term Sheet”). 4.02. The Board hereby approves the Term Sheet substantially in the form on file with the EDA. It is intended to be replaced and superseded in its entirety by a definitive Development Assistance Agreement to be approved and signed by the City, the EDA and the Developer. The 4 527758v1 RC110-90 Board authorizes staff of the City and EDA to negotiate with the Developer to prepare a definitive Development Assistance Agreement substantially in accordance with the terms set forth in the Term Sheet for approval by the City and the EDA at a subsequent meeting. PASSED AND ADOPTED BY THE BOARD OF COMMISSIONERS OF THE ROCHESTER ECONOMIC DEVELOPMENT AUTHORITY, THIS ______ DAY OF__________, 2018. PRESIDENT OF SAID AUTHORITY SECRETARY OF SAID AUTHORITY APPROVED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS THIS _____ DAY OF__________ , 2018. PRESIDENT OF SAID COMMON COUNCIL ATTEST: _________________ CITY CLERK APPROVED THIS ______ DAY OF ________, 2018. MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 5 527758v1 RC110-90